Summary

As a part of the easier global movement of capital and services, agreements expressed as securities also carry from one country to another. On the one hand, economic relationships, as do all others, naturally depend on trust, but the legal certainty of the relationships is equally important: is the agreement valid, is my claim guaranteed, whether and how I can assert my rights, etc. The first question in cross-border relationships and transactions is, however, which country’s legislation should be applied when looking to answer these questions.

Particularly considering the changes in the form of securities (from paper-based to electronic entries) and their safekeeping (from owners to the possession of service providers) during the last century, finding a suitable solution from private international law has proven complicated. The discussions in the last couple of decades have brought no global consensus. At the same time, the European Union, for example, is actively working on solutions with an aim of boosting cross-border movements of securities. Therefore, establishing a functioning principle of private international law is vital for ensuring the legally certain circulation of securities.

The article provides an overview of the developments in private international law concerning securities held by financial intermediaries. Before moving on to address legal issues involving securities, the characteristics of today’s securities are described, along with the way in which they move from issuers to investors and from one investor to another in the course of transactions.